CENTAURUS METALS LIMITED — Capital/Financing Update 2017

Oct 29, 2017

AUSTRALIAN SECURITIES EXCHANGE ANNOUNCEMENT & MEDIA RELEASE

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30 October 2017

STRONG EARLY EXPLORATION PROGRESS AT SALOBO WEST
Key copper‐gold prospects identified and 2D magnetic modelling highlights similarities to
neighbouring world‐class Salobo Copper‐Gold Mine
Key Points
 Field activities advancing ahead of schedule at Salobo West on key copper‐gold prospect areas with
first results from mapping, soil sampling and rock chip sampling expected by mid‐November.
 Initial work focused on the SW1‐B Prospect, a distinct 4.5km long Cu‐Au‐Fe(‐Co‐Ag) geochemical
signature that is locally over 600m wide and coincident with a strong east‐west magnetic anomaly.
 The SW1‐B Prospect has a favourable structural orientation and is truncated by the north‐west
trending Banded Iron Formation (BIF) unit of the SW1‐A Prospect, presenting an outstanding
structural target.
 Exploration activities now focussing on the SW1‐A Prospect, which is a 3.5km long Cu‐Au‐Fe
geochemical signature coincident with a strong magnetic anomaly located in the same stratigraphic
sequence as Vale’s giant Salobo Copper‐Gold Mine.
 2D magnetic modelling by independent geophysical consulting group, Southern Geoscience,
demonstrates that the SW1‐A Prospect has a magnetic susceptibility of 0.65 SI, which corresponds
well with the Salobo Mine (0.66 SI) as well as having similar geometry.
Centaurus Metals (ASX Code:CTM) is pleased to advise that field exploration activities at its 100%‐owned
Salobo West IOCG Project are advancing ahead of schedule with the first assay results from initial soil and rock
chip sampling work targeting the copper‐gold potential expected by mid‐November.
The exploration team’s initial focus was on theSW1‐B Prospect, a distinct 4.5km long Cu‐Au‐Fe(‐Co‐Ag)
geochemical signature that is locally over 600m wide and coincident with a strong east‐west magnetic
anomaly.
Exploration work is now focusing on mapping and sampling over theSW1‐A Prospectarea, where a 3.5km
long Cu‐Au‐Fe geochemical signature has been identified and where 2D magnetic modelling by Southern
Geoscience has shown a magnetic susceptibility very similar to that of Vale’s massive Salobo Copper‐Gold
Mine, which is located only 10km along strike.
Centaurus’ Managing Director, Mr Darren Gordon, said the Company was very encouraged by the initial phase
of field exploration in the world’s premier large‐tonnage IOCG province.
“Salobo West continues to surprise us on the upside, with initial field work already completed over the SW1‐B
prospect and now in progress over a second key prospect area, SW1‐A,” he said.
Australian Office Brazilian Office ASX: CTM
Centaurus Metals Limited Centaurus Brasil Mineração Ltda ACN 009 468 099
Level 3, 10 Outram St Avenida Barão Homem de Melo, 4391 office@centaurus.com.au
WEST PERTH WA 6005 Salas 606 e 607 ‐ Estoril Telephone: +61 8 9420 4000
Belo Horizonte ‐ MG ‐ CEP: 30.494.275
BRAZIL

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“These target areas define potentially world‐class exploration opportunities for the Company, and we’re really happy with how the field work is advancing,” Mr Gordon said.

“We have brought in a specialist geologist who has over 15 years of copper‐gold exploration experience in the Carajás with Vale. He is telling us that the Salobo West targets look very similar to a number of the IOCG deposits he has mapped during his time in the Carajás Mineral Province”

SW1‐B Prospect

Data extracted from the Anglo American Mines Department (DNPM) report[1] shows the SW1‐B Prospect is a distinct 4.5km long Cu‐Au‐Fe(‐Co‐Ag) geochemical signature that is locally over 600m wide and coincident with a strong east‐west magnetic feature (Figure 1 below).

The Prospect has a favourable structural orientation and is truncated by the north‐west trending Banded Iron Formation (BIF) unit of the SW1‐A Prospect, which is interpreted to be part of the north‐west extension of the Itacaiúnas Supergroup that hosts the Salobo Mine. The intersection of these two regionally significant structures is a priority area for exploration.

The SW1‐B geochemical signature continues beyond the western end of the coincident magnetic signature. The low magnetic response at the western end of the SW1‐B Prospect may be caused by the demagnetisation of the BIF host, either due to the formation of hematite or sulphides and this therefore presents another strong target within the SW1‐B Prospect.

Figure 1 – Salobo West Project, soil geochemistry digitized from Anglo American Mines Department Report showing +150ppm Cu anomaly (red) over CPRM Regional geology with Regional Magnetics (AS) in the background.

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1 Refer to ASX announcement on 5 October 2017 for more detail on Anglo American Mines Department Report information.

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SW1‐A Prospect

The SW1‐A Prospect has also been identified as an excellent high priority IOCG prospect within the Salobo West Project area. A distinct magnetic anomaly is roughly 3.5km long (Figure 1) and coincident with a Cu‐Au‐ Fe soil geochemical signature identified from historical Anglo American DNPM reports.

Work carried out on the regional aeromagnetic data by respected independent geophysical consulting group, Southern Geoscience, demonstrates that Centaurus’ SW1‐A Prospect has a magnetic susceptibility of 0.65 SI that compares very favourably with the magnetic susceptibility of Vale’s giant Salobo Cu‐Au Mine (0.66 SI), in addition to having a similar geometry (Figure 2).

Figure 2 – Salobo West 2D Magnetic Modelling of Aeromagnetic Data – SW1‐A Prospect compared to Salobo Cu‐Au Mine, from Southern Geoscience report, note that the Eastern profile crosses the SW1‐A Prospect (pink) and the Canga Fe Prospect (cyan).

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The magnetic susceptibility levels indicate the magnetite content of the rock. Given that the SW1‐A Prospect is hosted in the same stratigraphic sequence as the Salobo mine, it is reasonable to consider that the SW1‐A Prospect features the same host rocks and potentially similar mineralisation. This concept will be tested during exploration.

Serendipidade Prospect

The Serendipidade Prospect was identified from the archived Anglo American DNPM reports and has a 2.5km long and up to 700m wide Cu‐Au‐Ag‐Mo(‐U‐Fe‐Mn‐Co‐As) geochemical signature which is a similar geochemical signature of the nearby massive Salobo Copper‐Gold Mine.

The Serendipidade Prospect displays no magnetic signature, however, which may indicate that it is a hematite rich zone or that the target is not an IOCG target but rather another deposit type (VMS/Sedex). Geological mapping and sampling is underway to better define the nature of the deposit type.

The Serendipidade copper‐in‐soils anomaly (+250ppm Cu) has the highest copper (861 ppm) and gold (145ppb) soil samples collected by Anglo from the SW1 project area.

Canga Iron Ore Prospect

Whilst the focus of the current field exploration program at the SW1‐B Prospect has been on the copper‐gold mineralisation, the exploration team has also taken the opportunity to map the source of the extensive magnetic anomaly that is found in the same area to help determine the extent of the BIF associated with the high grade Canga Iron Ore Prospect.

The Canga Iron Ore Prospect is represented by a regional magnetic signature that runs east‐west for a continuous strike length of some 7km and discontinuously for up to 10km. Within the anomaly, a high‐grade iron canga outcrop has been mapped over a strike length of >900m and width of up to 150m with surface rock chip assays grading 62‐69% Fe with low impurities.

‐ENDS‐

Released by: Nicholas Read Read Corporate M: +61 419 929 046

On behalf of: Darren Gordon Managing Director Centaurus Metals Limited T: +618 9420 4000

Competent Person Statement

The information in this report that relates to Exploration Results is based on information compiled by Roger Fitzhardinge who is a Member of the Australasian Institute of Mining and Metallurgy. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited. Roger Fitzhardinge has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Roger Fitzhardinge consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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APPENDIX B – TECHNICAL DETAILS OF THE SALOBO WEST IOCG PROJECT, JORC CODE, 2012 EDITION – TABLE 1

SECTION 1 SAMPLING TECHNIQUES AND DATA

Criteria				Commentary
Sampling techniques				 There is no historical sampling for the Salobo West Project mentioned in this report.
				 9 surface rock chip samples were collected from outcrops for chemical analysis. Rock chip
				samples were taken and have been submitted to SGS Geosol laboratory in Parauapebas,
				Brazil.
Drilling techniques				 There is no historical drilling on the Salobo West Project mentioned in this report.
Drill sample	recovery			 No drill results are included in the release.
Logging				 All outcrop and sample points were registered and logged in the Centaurus geological
				mapping points database.
Sub‐sampling				 All geological samples were received and prepared by SGS Geosol Laboratories in
techniques and sample				Parauapebas, Brazil as 0.5‐1.5kg samples. They were dried at 105°C until the sample was
preparation				completely dry (6‐12hrs), crushed to 90% passing 3mm and reduced to 200‐300g. The
				samples were pulverised to 95% passing 150µm and split further to 50g aliquots for
				chemical analysis.
Quality of assay data and laboratory tests				 Chemical analysis is completed at SGS in Belo Horizonte. Metal Oxides are determined using XRF analysis (XRF79C). Fusion disks are made with pulped sample and the addition of a
				borate based flux. Analysis at ALS is for a 10 element suite. FeO is determined using titration
				and LOI using loss determination by thermo‐gravimetric analysis at 1000°C.
				 The SGS lab inserts its own standards at set frequencies and monitors the precision of the
				XRF analysis. These results reported well within the specified 2 standard deviations of the
				mean grades for the main elements. Additionally the labs perform repeat analyses of
				sample pulps at a rate of 1:20 (5% of all samples). These compare very closely with the
				original analysis for all elements.
				 Laboratory procedures are in line with industry standards and are appropriate for iron ore.
				 To date noQAQC samples were inserted byCentaurus for thisproject.
Verification			of	 Samples were collected by Centaurus field geologists. All assay results are verified by
sampling and assaying				alternative Company personnel and the Competent Person before release.
Location	of	data		 The survey grid system used is SAD‐69 22S. This is in line with Brazilian Mines Department
points				requirements.
Data spacing		and		 Not Applicable.
distribution
Orientation	of data		in	 The extent and orientation of the canga mineralisation was based on field mapping and
relation to	geological			regional magnetic anomalies.
structure
Sample security				 All samples are placed in numbered plastic sample bags and then a sample ticket is placed
				within the bag as a check. Sample request forms are sent with the samples and via email to
				the labs. Samples are checked at the lab and a work order is generated by the lab which is
				checked against the sample request.
Audits or reviews				 No audit or review has been conducted on the projects to date.

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SECTION 2 REPORTING OF EXPLORATION RESULTS

Criteria				Commentary	Commentary
Mineral tenement and					The Salobo West project includes the exploration lease (850.430/2016) and an exploration
land tenure	status				lease application (850.429/2016) for a total of circa 120km2.
					The tenements are part of an earn‐in agreement with Terrativa Minerais SA. Centaurus
					has now met the minimum earn in obligations under the Agreement and perfected 100%
					title to the Salobo West tenements. Only the SW1 tenement has been transferred at this
					stage as the SW2 tenement is yet to be granted. Terrativa retain a production royalty of
					2% over any minerals extracted from the tenements. The royalty may be converted to a
					25% project interest should it be sold to a third party.
					All mining projects in Brazil are subject to a CFEM royalty, a government royalty of 2% on
					copper and gold revenues and 2‐4% on iron ore revenues.
					Landowner royalty is 50% of the CFEM royalty.
					The project is covered by the Tapirape‐aquiri National Forest. Exploration and mining is
					allowed in the forest with the correct licences. The Company has received the key
					environmental licences for non‐ground disturbingexploration activities.
Exploration	done		by		Historically the Salobo West tenements have been held by Vale and although it is
other parties					understood that exploration was carried out, no public exploration data has been found
					on the tenements to date.
Geology					The Salobo West tenements are located in the Carajás Mineral Province, located in the
					south‐eastern part of the Amazon craton in northern Brazil. The CMP represents an
					Archean block divided into two distinct tectonic domains. Salobo West is located in the
					northern Carajás domain within the Cinzento Shear Zone
					The Salobo West tenements cover a portion of the Itacaiúnas Supergroup where it is in
					contact with Xingu basement rock.
Drill hole Information					No drilling has been conducted on the Salobo West project.
Data	aggregation				No cut‐offs have been applied in reporting of the exploration results.
methods					No aggregate intercepts have been applied in reporting of the exploration results.
Relationship		between			No drilling has been conducted on the Salobo West Project.
mineralisation		widths
and intercept lengths
Diagrams					Refer to Figures 1‐2.
Balanced reporting					All Exploration Results received by the Company to date are included in this report or can
					be referenced inprevious ASX announcements.
Other	substantive				The Company is working with the CPRM geological and geophysical regional data sets.
exploration	data
Further work					The Company has engaged Grant “Rocky” Osborne and Southern Geoscience Consultancy
					to carry out additional work on historical information found in Mines Department
					Reports.
					The Company has started mobilisation of its field team to the Salobo West project to
					carry out survey line clearing, geological mapping and soils geochemical sampling.